09-01-13 Weekly Recap & Outlook

Stock Index Futures:

 

Well, it should be pretty clear how I feel about the stock index futures after yesterday’s blog post/rant I wrote.  In summary, yes it is bullish that the weekly charts are still holding above the 20ema.  You can’t just write that off as a reason to be looking for upside though.  You need confirmation from the daily chart and it is just not there.  Also, the 20ema has already been bought twice so that is what everyone in the whole world is probably buying right now while they are filled with complacency.  They will probably loose money, as they should.  So, looking for more downside.  I am watching round numbers right now $1600 on S&P and $1000 on Russell.  I am not just looking for these targets to be hit, but they are also support levels so I will be watching at what type of reaction we get from these. 

Crude Oil:

The breakout did come, then it went.  As bullish as I am, I cannot just ignore both of these distribution bars on the daily and weekly.  Bulls are going to have to deal with that level of supply above $110 which only makes that key level even stronger.  We also came back into the consolidation zone and closed inside of it which also isn’t a good sign.  On the bright side, we did get the slightest bit of accumulation off of the 20ema on the daily charts Friday.  I consider that a decent reaction off of a support level.  Long term, I am still very bullish.  Short term, bulls really need to work through or setup a platform to break above that distribution.  Other than that I will just be watching the support resistance on the daily chart.

Gold:

Like I said last week, I expected $1420 to be major resistance after that huge run off of the lows.  Similar to crude we got distribution on daily and weekly charts but the difference is gold is in an intermediate term downtrend.  So if it breaks under $1392 support level, I will be watching the daily 20ema which is at $1370 right now.  Looking at the weekly chart, that sharp V like reversal is very bullish so there is no reason to loose faith yet especially with the monthly chart still in a long term uptrend.  Whatever happens, in the near future $1320 will be absolutely key to hold if gold wants anymore upside even $1340 would be better.  An extremely bullish scenario would be consolidating up here near these highs, and that could act as a launch pad to $1475 and above.  For now, you could really just look at the daily chart at all the support levels I am watching for reactions off of to gauge how much strength is in this market.

Market Internals:

Ok, so lets forget for a second about the levels they are actually at right now.  Just take a look at where they are headed.  There isn’t technical analysis needed here, they are either going up or down.  Now, you see they are going down.  Next what I do with these is look at the level at which they are trading at.  Percent of stocks is trading at 45% of stocks above the 200sma, these are all NYSE stocks as well not just S&P like most people like to look at.  McClellan is trading at –2000 which obviously isn’t bullish.  Also VIX is rising.

Economic Releases:

Markets don’t open until Tuesday due to Labor day.  After that the highlight of the week is definitely the Employment Situation on Friday.  There are some good events before that though that should keep the market moving on this shortened week.
Take it easy and happy trading to everyone,
-Michael